IBM plans to buy Merge Healthcare in a US$1 billion deal that promises to bring new image-focused capabilities to its Watson Health platform.

Under the terms of the acquisition, which was announced Thursday and is expected to close later this year, Merge shareholders will receive $7.13 per share in cash. The deal is IBM's third and largest major health-related acquisition since it launched its Watson Health unit in April.

Merge's technology provides medical image handling and processing and is currently used at more than 7,500 U.S. health care sites. IBM plans to use its Watson Health Cloud to analyze and cross-reference Merge's medical images against lab results, electronic health records, genomic tests, clinical studies and other health-related data sources amounting to 315 billion data points and 90 million unique records.

In effect, IBM believes the combination of the two firms will help advance its Watson cognitive computing system beyond natural language and give it the ability to "see." The goal, it said, is to shed new light on current and historical images, electronic health records and data from wearable devices.

Armed with the new capabilities, clinicians, for example, will be better able to efficiently identify options for the diagnosis, treatment and monitoring of health conditions such as cancer, stroke and heart disease. Researchers, meanwhile, will gain new insights to aid clinical trial design, monitoring and evaluation, IBM said.

Overall, the combination could better equip providers in radiology, cardiology, orthopedics and ophthalmology to deliver more personalized approaches to the diagnosis, treatment and monitoring of patients, it added.

Late last month IBM partnered with CVS Health with a focus on using predictive analytics to help manage chronic diseases. Its other health-related acquisitions this year have included Phytel and Explorys.

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